An expensive place to breed: 3 June 2019

Jun 3, 2019

An expensive place to breed...
An expensive place to breed…

IN looking hard at aspects of the cost of operating bloodstock in South Africa, don’t worry, this is not going to turn into an historical tale of recent-years woe. Mind you, if someone one day writes the book freely and unfettered, it will be “a read” to rival Horsetrader and A Wild Ride.

Anyway….”this” is a look at just some of the differences in bloodstock processes at home and abroad that currently have particular impact on us in South Africa.

As previously here remarked, South Africa is barely in the swim of exchanging employees, engaging and swapping international showers, preppers, foalersdowners as they work round the globe doing their time.

Currency is at the heart of it along with the much discussed dearth of new SA blood coming in to be educated whether locally or by joining the overseas bandwagon.

In administration, not many NHRA staff and trainees have “done a month” at Weatherbys or another overseas industry administrator. And the only reason one sees a South African touring the sale grounds of England and Ireland is on SAEHP business or encouraging visits to CTS Sales.

Our SA circumstances do not encourage buying missions (or setting agents loose to restock) as used to happen more regularly. A form of isolation from information flow thus takes place.

Of course not every overseas owner or breeder or trainer is constantly in the international mix, but their consultants/managers/agents are.

OFF to Stud - Phoenix of Spain, a 220,000 guineas yearling, with his owners and their adviser, trainer Charlie Hills, handler and Jamie Spencer
OFF to Stud – Phoenix of Spain, a 220,000 guineas yearling, with his owners and their adviser, trainer Charlie Hills, handler and Jamie Spencer

I was reminded yesterday of the difference. PHOENIX OF SPAIN (Irish 2,000 Guineas winner by Lope de Vega) is to stand at The Irish National Stud which acquired the stallion rights over the winter, punting on his development between 2 and 3. The INS manager is quoted as saying “We spoke to Geoffrey Howson (senior consultant/agent) who looks after the owners’ interests and luckily we got the deal done”.

I myself am of course looking forward to their call when the next one in our team demands such attention. Keep your eyes on FLYING STANDARD when he runs.

Owners are the principals and are therefore the decision makers, as Mike de Kock readily acknowledged on Saturday, deferring to Sheikh Hamdan on plans for HAWAAM while of course giving his views. And to Racing Manager Angus Gold who makes it all happen. Ordinary owners may look after their own affairs but most need an adviser to be aware of all related developments and costs and most stud farms have a regular consultant.

Aside from the non-layer of information gatherers, there are some things that happen in South Africa that take some explaining to overseas owners. Some are entirely valid local “differences”. You can’t train at Milnerton as if in Newmarket. You can’t or apparently can’t break your maiden in handicaps as the majority do in UK after getting a mark in maidens. Yearling prep is different particularly regarding lungeing.

But some things do startle people. Including the bills for breeding.

Yes the bills. Having been knee deep in NHRA registrations recently, fortunately with two highly professional colleagues taking the brunt of it, I feel qualified to make some points about bills.

Excerpt from NHRA Scale of Fees.
Excerpt from NHRA Scale of Fees.

NHRA’s effort to reform the stallion-related rules is laudable. The timing and communication was imperfect, but the process is intended to be helpful in the end, if somewhat laborious. Next…

How much does a UK breeder pay to register a foal? Answer £87.50 ex VAT before the 31st July deadline (foals born 1st January of the same year onwards). Based on a current achievable exchange rate, that is approximately R1,600 ex VAT which is roughly the same as the routine fee in South Africa (excluding the SAEHP funding levy = an additional R1,000 on 2018 foals, but with the mysterious word “onwards” on the published scale).

Thus… the same foal registration fee level in a country where breeding (basic) keep costs are something like a third of those in the UK. And there is another comparison that flows from that information.

Training a horse in the UK costs (basic) perhaps 3.5 times as much as in South Africa. Currency is again the point, and of course the figure is just a figure because there is a range of daily training costs in both countries. But let’s go with 3.5 at a good but not “Ritzy” level.

This means that SA is a quarter to well under a third of the UK basic cost for training. Ah hah! Readers may note (a couple of paras above) that breeding keep is about a third. It follows therefore that – relative to training costs – breeding keep in SA is more expensive than in UK.

Back to registrations. How much to register a mare annually in UK, Ireland etc? Nothing. Why would you register your own mare every year? Register if Change of Ownership, sure. In SA, pay R272 per mare incl VAT per year which is not a lot but cannot reflect the huge amount of costly work on both sides going through the same registrations year after year, often with an enormous palaver when mares are not shown as having been registered when they were, and long dead mares still show up for renewal. NHRA is addressing all this slowly to get “on-line” into workable shape, which is good, but not, I think, the fee structure.

‘And I promise to remind that human who owns us to register himself and me as well as you.’
‘And I promise to remind that human who owns us to register himself and me as well as you.’

The same applies to annual “registration as a breeder”. “Sorry?” says the innocent breeder from a country where no such fee and process exists, “What’s that?” “That” is an annual fee of 5-6 times the cost of registering a mare. Holy Smoke! Why do I need to register myself more than when I started out?

Add such factors to the extra sales fees and high commissions that we have discussed before in this column, and breeding in South Africa is expensive.

Sadly, returns in the ring, bar a few, have absorbed the fortunes of many an overseas breeder operating in South Africa, not to mention the many South African breeders under pressure created not only by current purchasing budgets but by the fundamental fact that in real terms South Africa is an expensive place in which to breed.

SOS! We love it and are still in it for better times! Does it have to be structured like this? At no time has the breeding community – and those of us who have brought in tens of millions of investment rand over the years and seek to extend it – been in more desperate need of clear, precise communication, explanation, justification, outreach and consultation from the governors and trade associations.—tt.

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